What is the fair market value of a perpetual preferred share just after the quarterly dividend of $1.40 has been paid if shares of similar risk are earning 5.5% compounded annually?
C&D Stereo sold a stereo system on a plan that required no down payment and nothing to pay until January 1 (four months away). Then the first of 12 monthly payments of $226.51 must be made. The payments were calculated to provide C&D Stereo with a return on the account receivable of 16.5% compounded monthly. What was the selling price of the stereo system?